The year 2000 was a good year for Joshua Feinberg, an IT consultant in West Palm Beach, Florida. A flurry of Y2K projects and other work led to "a tremendous year," he says.

But there was a problem: Feinberg had established his business two years earlier without the help of an accountant, and money matters were suddenly an issue. Once he finally did meet with an accountant that December, he had to spend his New Year's Eve running around to mail an application for a new tax plan that would save him several thousand dollars. Everything worked out, but he could have saved time and money by getting it right the first time. "It would have been less of a panic," says Feinberg, 30. "It was kind of a last-minute stretch."

Taking care of the basics out of order can wreak havoc on your business before it gets off the ground, or at the very least cost you in money, time and frustration after it's already up and running. Donna Holmes, director of the Small Business Development Center at Penn State University in University Park, Pennsylvania, has seen entrepreneurs make many of these mistakes, such as running up thousands of dollars in personal credit card debt assuming a business loan will come through, only to be denied. "You have to make sure things are done in an order that's not going to hurt you in the end," Holmes says.

But what should you do first, and what should be last on the list? How do you find order in all the chaos of starting a company and avoid backtracking and wasting time? Here's some advice from the experts, as well as entrepreneurs in different industries who have been there, done that.

Business Order 101
Like parenting, what to do-and when to do it-is a learned skill in starting a company. "Once you've done it three, four or five times, everything's just automatic," says Bruce J. Lynskey, a professor at the Owen Graduate School of Management at Vanderbilt University in Nashville, Tennessee, as well as an entrepreneur who has started six technology companies. Today, he's the CEO of Nashville software start-up Visual Risk Technologies. "You just do it instinctively."

The first time around, however, is anything but instinctual. Lynskey has watched beginning technology entrepreneurs backtrack to take care of patenting and trademarks or create agreements to protect their companies from liability if bugs in their software ruin clients' computer systems. "Somehow, the company got up and running, and they're going backward now to do these formation things that should have already been done. At that point, it can become a little messy," Lynskey says. "It could be the end of the business."

Spending money on a knowledgeable intellectual property attorney was Eric Sieczka's first step as soon as he had an idea and a business plan for his second technology start-up, Pixel Velocity Inc. A bootstrapped digital imaging hardware and software company in Ann Arbor, Michigan, that's developing Department of Defense products for commercial use, Pixel Velocity needed help patenting the company's main idea, registering a trademark and incorporating in July 2001. "It's a prudent step, because otherwise you could invest a lot of time and energy in something that ends up not being yours or puts you in a position where you have to defend it in court, which can kill a small company," says Sieczka, 32, Pixel Velocity's co-founder, president and CEO. "Spending money on good legal advice early is a smart use of money."

The company secured a Web domain, and a few months after getting legal advice, Sieczka hired a CPA to help Pixel Velocity set up its books for tax purposes. Then the company kept a low profile, building its product slowly and deliberately behind the scenes with very little capital. The company's six employees worked part time and for equity. Hiring full-time sales and marketing people and buying risk management insurance wasn't a priority until the company launched products late last year.

"We didn't want to create a lot of visibility until we had something to show," he says. "The timing is really important, to make sure you're not putting yourself out there before you're ready." Think about what naturally makes sense at what time, he suggests, and don't rack up debt that requires you to create early cash flow before you're ready.

"To me, it's logical. You can't sell something until you have it, and you don't have it until you know that what you're going to create, you own," Sieczka says. "You have to take the steps to make sure you're not wasting time, energy and money in the wrong places."

Timing Is Everything

Lynskey suggests you make a list of everything you need to do
before opening your doors. Then just start backing up from that
point, he says. A list makes you put things in order, and it will
grow longer as you write it.

"This doesn't take a rocket scientist. There's an
obvious order to most of the items on the list," he says.
"You'll see lots of dependencies, that clearly this item
needs to be done before that one. Build potential problems into
your opening day."

This is especially important if you're opening a retail
store, where a target opening date can be pushed back three months
before you know it. It took Rebecca Velasco, 40, founder and owner
of Muse, a women's apparel store in Newport, Rhode Island, more
than one year of planning before her store opened this past April.
Even with a background in women's retail, one of the first
things she did was seek out a business advisor at her local
SBA office.

"Without his insight, I probably wouldn't have been
able to foresee all the things I had to do," Velasco says.
"I wanted to do everything right because I didn't want to
backtrack, open wrong and get penalized."

It's All About Who You Know

Learn how to make the most of your
relationships with the folks who'll keep you out of trouble,
help you make decisions and share their business knowledge with
you:

Velasco spent all of 2001 writing her business plan, and spoke
with an accountant to learn more about tax laws and setting
projections. Ultimately, her business hinged on landing about
$50,000 in outside financing. Her parents lent her $25,000, but it
didn't cover all the start-up costs. "It was the very
first thing I had to think about because I didn't have the
money," she says. "Your whole plan changes based on your
funding issues."

Velasco held off on large expenses until she had secured
additional financing. When she received a $15,000 loan through the
city of Newport last February, things started falling into place
quickly. She signed a two-year lease on a 500-square-foot retail
space after hiring an attorney to read it, contacted a merchant
services company to set up credit card processing,
purchased used clothing racks and ordered her first inventory. Her
approach wasn't without beginner's mistakes, however. She
opened her business account where she did her personal banking
without realizing the rates were astronomical. "I had to close
that account and open another one later," she says. "I
would have saved a lot of money if I hadn't acted so
quickly."

Make sure you're set with the state in terms of licenses and
permits, then think about what you need to operate, Velasco
suggests. Muse projects 2003 sales of $250,000.

T Minus 1
Year

Keep to this schedule, and use the year
leading up to your business's grand opening most
effectively.

One year before
you open: Research your idea and take a business
workshop.

Six months
before: Do a competitive analysis, start writing your
business plan, and think about where you might locate your business
based on demographics.

Four months
before: Do a cost analysis; review potential leases with
an attorney. Choose your business structure with the help of a
lawyer and an accountant. Join some business and trade
organizations.

Three months
before: Establish your rough financial objectives, sales
forecast and pricing; write your marketing and personnel plan.
Prepare your income statements and balance sheets, and settle on a
business name. Consult with an accountant.

Two months
before: Meet with a banker to review your business plan
and secure financing. Then get ID numbers, open your bank accounts,
decide on a merchant services company, get insurance coverage, set
up your bookkeeping system, order first inventory and schedule any
leasehold improvements.

One month
before: Do a final check on financial statements, office
setup and display, legal, licensing and utilities. Send out
announcements and start your promotional push.

Open your
doors!

Source: The
Pennsylvania Small Business Development Center/Gannon University
SBDC

First Things First

Your order will depend in part on your chosen industry and
personal situation. But no matter what your business, don't
think you know how to structure everything without some
professional help. Based on his own experience, Feinberg suggests
talking to a CPA first. "It's a good place to start, a
good resource," he says.

To keep your costs down, do some homework to target your
questions to cut the time you spend with professionals who bill by
the hour, Feinberg says.

What if the business you're starting is homebased? When
Stacey Cohen founded her Mt. Kisco, New York, marketing and PR
company, Co-Communications Inc., in late 1997, her plan was to grow
her homebased business slowly and strategically for five years. She
had very little overhead and wasn't dependent on outside
financing. Instead of writing a business plan, the first thing she
did was invest $6,000 in a logo, embossed letterhead and business
cards.

"In the launch stage, I needed something to speak volumes
about my company, and I spent a ton of money on it," says
Cohen, 42. "Some people would first look at the bottom line
and ask how much revenue I was going to produce, what target
markets I was going after. I knew I had to do that, too, but first
I had to set the tone, the image of the company."

Obtaining a business license, setting up a bank account as a
sole proprietor, registering the Web site www.co-communications.com and starting to network
vigorously all followed in quick succession. "I put myself out
there with those gorgeous-looking business cards and passed them
around," she says. She bartered
early on with a graphic designer to create her Web site in exchange
for PR services. When clients came calling six months into the
business, Cohen felt it was time to outsource a bookkeeper.

"The billing in advertising and marketing is very
complicated. There are commissions and markups," she says.
"I had to make sure everything was in line."

In 1999, Cohen moved
her business into a downtown office space. Sales in 2002 were
around $750,000, and she's projecting more than $1 million in
sales for 2003.

The best thing you can do in the early stages of your business
is to create a timetable for how you'll take care of the
basics. "Things are always thrown in our path to take us off
our timeline," Cohen says. "But if you can stick to it as
closely as you can, you're guaranteed success. And success
breeds success."

Just Do It...or Don't

Cover your bases and get these decisions right the first
time:

DO consult with an accountant and an attorney before
your business opens to choose your business structure and take care
of any necessary papers.

DO get your state licenses and ID numbers before taking
care of mechanics such as setting up your business bank account and
seeking insurance coverage.

DO protect your company from product liability before
you start selling. This is particularly important in the technology
field.

DON'T sign a lease before you've secured
financing and done your due diligence on a location's
demographics and foot traffic.